America’s Energy Advantage today issued the following statement in response to The Department of Energy’s (DOE) conditional approval of the Cameron LNG Application.
Statement of America’s Energy Advantage:
“Amid the worst propane shortage in recent memory caused partially by record propane exports, and with Americans paying the highest natural gas prices in four years, we are surprised that the Obama Administration has given yet another green light to send more American LNG to countries which have not signed a free trade agreement with the U. S. The propane crisis of today could soon become the natural gas crisis of tomorrow unless there is a significant change in approach by the Department of Energy.”
“This latest approval is a big win for our global competitors and another blow to American consumers who are paying and will continue to pay higher prices to heat their homes. We remain very concerned that exporting such a large volume of this strategic commodity, which is vital to U.S. competitiveness, is contrary to the national interest. Natural gas prices have nearly doubled since approval of the first LNG export terminal, and this approval raises the cumulative volume of LNG export capacity to 15 percent of total U.S. domestic production. The world has changed dramatically since 2011, yet DOE continues to rely on outdated and obsolete data to justify export decisions. We reiterate our call for the Administration to take an immediate “time out” from further LNG export approvals until a new, comprehensive, and consensus review of current market conditions is completed.”
• U.S. propane exports are up to 20% of domestic supply, having increased to 410,000 barrels per day from 233,000 in 201, according to the Energy Information Administration (EIA).
• Propane costs have risen from $2.30/gallon in February, 2013 to $3.89/gallon in February, 2014, an increase of nearly 70%, according to EIA reports.
• The Midwest Governors Association sent a letter to President Obama urging him to take action and help reduce the propane price spikes and shortages.
• In an analysis of the DOE NERA study that was used to justify all of the export applications to date, Charles Rivers Associates warned in March, 2013 that unchecked exports of U.S. natural gas could lead to a tripling of natural gas prices from current levels by 2030. Their research went on to conclude that such an increase will have disastrous trickle down effects for the consumers, the manufacturing sector, employment and overall GDP.
• Last year, ConocoPhillips projected domestic natural demand will exceed DOE’s projections by 30 percent in 2017 – just three years from today.
• A September, 2013 JP Morgan research note projects that natural gas prices will spike to $8.00 per million BTUs by 2016 — more than doubling its current price in three years.
• In January, 2013, Purdue University found that whether LNG export levels are at 6Bcf/day or 12Bcf/day (NERA’s low and high scenarios), it will result in a decline in GDP and higher electricity prices for all Americans. Put simply in their conclusion, foreign companies and consumers stand to gain while American companies and consumers lose.
About America’s Energy Advantage
America’s Energy Advantage (AEA) is a trade association representing many of the world’s leading manufacturers and commodity producers, as well as the United States’ publicly-owned natural gas distribution companies. Our organization is a strong supporter of rules-based free trade and believes that open markets create new opportunities for economic growth and higher standards of living for all Americans. AEA is dedicated to educating the American public about the growth in American manufacturing that has been made possible by our country’s abundant and affordable supply of natural gas.